Previous SectionIndexHome Page


Roger Casale: Thank you very much, Mr. Deputy Speaker, for reminding us that this is a debate. It is much better to meet criticism in debate than to try to raise points of order.

The public have not got the wrong idea about the Opposition—the problem for the Tories is that they take a long time to forget. The Tories spent money recklessly when in office but that does not give them the right to challenge our decisions in government to invest public

6 May 2003 : Column 597

finances wisely to rebuild schools and build new hospitals after decades of neglect and under-investment. Many big, long-term challenges are micro-economic in nature and are addressed by the Bill, but we must not forget that the point of a Finance Bill is to allow the Government to raise taxes. We need to raise those revenues to meet our commitment to invest in public services.

Let us also not lose sight of the substantial advances that have been made since we broke the boom-and-bust cycle of the past and put the economy on a stable, long-term footing, without which we would not have the confidence to take the measures that we are taking in the Budget and the Finance Bill. Without that confidence and stability we would not have a robust answer to the question asked by my constituents—"Where is the money that you want to spend going to come from?" The Opposition may wish to divert attention from the fact that we have a better record on economic management than they do by criticising us for not being perfect. We have heard some Panglossian speeches this evening as well as important and substantial technical points about the Budget, especially from the right hon. Member for Fylde (Mr. Jack), which we can consider when the Bill goes into Committee. We should remember—my constituents certainly do—that what is important is the fact that we can be trusted with running the economy, but the Opposition cannot.

The Government are performing well not only against previous Governments but according to any international comparison. My experience of talking to my constituents is that they understand that message very well. They want to be better off in future, not worse off; they want an economy that will offer greater opportunity to their children than was available to them; they want to be able to plan for the future and save for their retirement. Perhaps one of the greatest virtues of the Bill is, one might say, the fact that it is a little more boring than previous Finance Bills. There is nothing that may be described as overly radical, but it builds on the foundation of earlier years. It gives us more of the same, giving my constituents the feeling that life is a little more predictable than it was under the Tories, when one could lose one's job and prospects overnight and one's mortgage payments could treble or quadruple in a matter of weeks.

The remarkable thing about the Opposition is that, rather than learning the lessons of past mismanagement, they continue to oppose precisely those measures that we have taken to stabilise the British economy and keep it on a sustainable long-term trajectory. Indeed, they are doing so again tonight by attacking the Bill's provisions. They opposed the measures that we have put in place to make work pay and get people back to work. They opposed the measures that we put in place to tackle poverty, much of it the result of their economic mismanagement. Now, as we invest the dividend of sound economic management in our public services, they oppose the measures needed to raise the extra resources going in. They may say that they do not, but they do. They do not have an answer—the Bill is such an answer—to the question of where the money is coming from to make that investment. Their prescription is that of a party that failed in the past and is made to a

6 May 2003 : Column 598

Government who are succeeding. Accepting that prescription would have the consequence of undermining people's prospects and quality of life in future. I said earlier in an intervention that the Opposition's prescription is misguided and misplaced, and we should reject it. Let us not forget that our prescription for the NHS is 80,000 new nurses and 25,000 more doctors. It all has to be paid for, which is why the Bill before us tonight is important.

We know very well that the Opposition want to make at least 20 per cent. cuts to public services, and the great advantage of a debate such as this one is that we can keep a tally of where those cuts will be made. We have heard from the hon. Member for Arundel and South Downs (Mr. Flight) that he opposes some of the changes to stamp duty that are contained in the Bill. He himself gave a figure of £8 billion that would be lost to the Treasury if our changes to stamp duty did not go ahead. We have also heard that he will oppose the changes that we are making to national insurance. That would cost the Exchequer £10.2 billion. Finally, we have heard that he opposes the changes that we are making to VAT collection that will yield an extra £3 billion to the Exchequer. While he was speaking, I began to tot up the cost of the measures that he said his party would oppose. I reached the sum of £23.2 billion, and that was before taking into account the threat made by the hon. Member for Arundel and South Downs to raise the ceiling on personal allowances, which would yield further billions of pounds in revenue cuts. He gave an indication of how much would be involved in total when he referred to a sum of about 8 per cent. of the overall tax take.

The hon. Gentleman then challenged the Chief Secretary to say what the economic effect of his speech would be. One effect of implementing the revenue cuts on the scale that the hon. Gentleman set out—he says that, in principle, he does not want to cut public expenditure, but showed us tonight how in practice public expenditure would have to be cut—would be that we would lose hospitals and schools, and investment in extra police officers and transport links throughout the country, in my constituency, in the hon. Gentleman's constituency and in those of other hon. Members throughout the House.

I have listened to the debate, but the Conservative party does not have a prescription for reforming public services. It cannot have such a prescription because, on the basis of tonight's debate, it will not have the money to invest in public services. Without backing up reforms with money, there is no prospect of them working and being sustainable in the longer term.

I welcome the Finance Bill. Its measures are needed to raise the money that we are committed to raising to invest in our public services, and we have seen tonight how that money would be taken away from our schools and hospitals and the fight against crime and from investment in our transport infrastructure if the Conservatives, with such a miserable record of economic management, were ever to be returned to office again.

8.1 pm

Mr. Mark Simmonds (Boston and Skegness): I am interested to follow the hon. Member for Wimbledon (Roger Casale) who made what can at best politely be

6 May 2003 : Column 599

called an intriguing contribution to the debate, the relevance of which to the Finance Bill I cannot quite fathom. I declare my interests as detailed in the Register of Members' Interests.

The presentation by the Chief Secretary of the Finance Bill this afternoon was duplicitous on an industrial scale. There was no mention of the 60 tax rises that we have seen since 1997, despite promises to the contrary before the 1997 election. There was no mention of the fact that tax revenues have increased by 50 per cent. since 1997—£5,500 in extra tax taken per household per year.

It is claimed that the Finance Bill is deregulatory, and that one of the main tenets of the preceding Budget was to build a more enterprising economy. I wondered whether we were hearing one of the Chancellor's rare moments of humour. The Government have piled red tape and bureaucracy on large and small business alike to the tune of between £15 billion and £20 billion per annum since 1997. In addition, in the first five years of the Government, we have seen 19,322 new regulations, which some say is exactly the same as under the previous Conservatives Government, but not at all, it is a 53 per cent. increase in regulations.

Like several hon. Members in today's debate, I wish to make a few remarks regarding the Chancellor's borrowing predictions underpinning the Finance Bill. He has had to reassess his growth forecasts twice in four months. His growth forecast this year is at least 1 per cent. out, and the borrowing forecast is a dramatic £27 billion this year alone—a sum totalling £110 billion over the next five years. That is on the basis of what most independent commentators, including the Institute for Fiscal Studies and the Bank of England, believe are over-optimistic growth forecasts.

The Chancellor has calculated his sums perversely and incorrectly. He should first assess the economic growth and then calculate the size of the tax revenue stream and therefore how much we can afford to spend as a country, not, as he has done, decide the spending levels and then assess his economic growth predictions to fit. Fiscal sustainability is a prerequisite for macro-economic stability.

It is no coincidence that while the Chancellor was relatively prudent and controlled public expenditure, the economic tanker, fully fuelled and steaming full ahead in May 1997, continued approximately on the same course. It began to unravel when he removed the tight control of public expenditure. In the context of a weak European economy, that was not a sensible thing to do. Indeed, his achievement of ensuring that the deterioration in Britain's public finance is worse than that in most of the rest of the European Union is a spectacular failure, particularly considering the overweening and inflexible labour markets that exist on mainland Europe.

When public expenditure is growing at 8 per cent. and the economy at only somewhere between 2 per cent. and 2.5 per cent., something has to give. That was predicated in the Budget on strong growth in tax revenues. This year's tax revenue growth prediction is 7.8 per cent.; next year's 7.4 per cent.; and in 2005–06, 7.2 per cent. Last year the rise was only 1.8 per cent. That disparity appears enormous. Only time will tell, but the Chancellor's predictions on which the Finance Bill is

6 May 2003 : Column 600

based look wholly and utterly irresponsible. It does not take a genius to conclude that there is an enormous fiscal hole, despite an additional £27 billion in taxation revenue this year. Most independent commentators believe that further taxes will have to be introduced to pay for that mismanagement and over-optimistic gamble.

The Budget and Finance Bill debates would be of much greater complexity if the additional expenditure was contributing to or driving improvements in public services, but there is no such improvement. Public transport is worse, secondary education has deteriorated, with some notable exceptions, and the starkest statistic of all, to which my hon. Friend the Member for Arundel and South Downs (Mr. Flight) referred, is that despite a 22 per cent. increase in health expenditure, there has been only a 1.5 per cent. increase in the number of patients receiving hospital treatment, and that is despite the hard work and tenacity of those who work in the health service.

That is not just my view. It was confirmed by the politically independent chairman of the British Medical Association. Surely the Government must see that there needs to be an alternative solution to improving public services other than just throwing extra money at services. We need significant and real reform, which in my view will never happen under this Government because of the vested interests within the Labour movement. A centralised, monopolistic, uniform provision of service based on queueing and rationing will never succeed.

The surest way to stimulate economic growth and entrepreneurial skill and to sustain job creation is to control public expenditure and reduce taxation, thereby increasing the Exchequer's take. There is no doubt that an expansionary and inflationary public sector limits private sector investment and growth. The inverse is also true. Restraining public expenditure necessitates and encourages private investment and job creation. I suspect that the main driving force behind the employment figures is not the sustainable expansion of the private sector, but rather a massive growth in the public sector. In short the Government are buying jobs with taxpayers' money. That is evidenced by the NHS having more managers than beds.

I welcome parts of the Finance Bill, including the simplification of VAT, improving access to growth capital for small businesses, the cut in bioethanol duty, the abolition of bingo tax—although we shall need to look at the detail—pensioners receiving longer pension entitlement during hospital stays, and the principle of helping our poorest and most vulnerable pensioners.

However, an additional £100 for those over 80—less than £2 a week—is nowhere near enough to compensate pensioners in my primarily rural constituency and many others throughout the country who have had to suffer council tax increases over and above the rate of inflation, primarily because the Government are deliberately transferring resources away from rural areas into their own urban heartlands.

Not only has Boston borough council lost £500,000 this year in grant income, causing enormous consternation and concern in a low wage area, but the Office of the Deputy Prime Minister has changed the

6 May 2003 : Column 601

funding and removed the local authority social housing grant. The House will be delighted to know that I will not explain that very complex matter in great detail.


Next Section

IndexHome Page